In U.S. Stock Market Rally, Apple Briefly Supplanted Exxon Mobil

A trader at the New York Stock Exchange watches a monitor moments before the Federal Reserve announced it would keep interest rates low through at least 2013. The news reassured investors and helped sustain a rally.

Mario Tama
/ Getty Images

For evidence of the volatile swings of Tuesday's stock market, consider that for a bit, Apple became the most valuable American company, surpassing Exxon Mobil. The day's trading spanned 600 points, as investors rallied from two days of steep declines and digested new guidance from the Federal Reserve.

The S&P 500 index of large-cap U.S. companies saw its largest gain in two years, rising by nearly 5 percent. Just the day before, it had fallen by 6.7 percent.

For Newscast, Yuki Noguchi filed this report:

Wild swings of several hundred points in the market have become an almost daily occurrence. Following the Dow's recent big plunges, some investors early this morning figured they might as well bet on a bounce.

The Dow staged an early rally. But the real volatility came after the Federal Reserve Open Market Committee announced its decision to keep interest rates at basically zero through mid-2013 — a timeframe it previously hadn't specified.

Stocks went up slightly, then down big, and then surged right up through the final minutes of trading. The flight to safer gold and Treasurys continued.

In the end, shares of Apple gained by nearly 6 percent, giving the maker of computers and personal devices a market capitalization of around $347 billion.

Exxon Mobil, which saw its stock caught in the slump earlier Tuesday, eventually rebounded to finish up 2.1 percent on the day. With the late gain, the company held onto its top spot, with a market capitalization of $348 billion.

After its mid-day meeting, the Fed's Open Market Committee released a statement acknowledging that U.S. economic growth had been slower than anticipated. But the panel also noted that inflation levels were moderate and stable.

Saying that it had "decided today to keep the target range for the federal funds rate at 0 to 1/4 percent," the panel's statement also said its members "discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability."

"The Fed is clearly setting up a situation that could offer them the potential to do something significant, if necessary," Bruce McCain, who helps oversee $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a telephone interview. "That could be viewed as a positive," he said. "People are starting to realize that what we've had in the market was an overreaction."

At the end of trading Tuesday, the Dow Jones Industrial Average finished at 11,239.77, a gain of nearly 430 points, or just under 4 percent, from Monday.

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